Jean Michel Jarre, the only French global rock star, has been into Downing Street to discuss moving to London to escape Francois Hollande’s tax hikes. The French President wants confiscatory 75% tax rates for high earners.

In secrecy Jarre recently visited Number 10 to discuss his “defection”. The news that Downing Street is involved in discussions with another high profile tax exile from France will cause outrage in the Elysee Palace. Gerard Depardieu’s planned flight from Paris to a small village less than half a mile across the Belgian border caused an uproar and French Prime Minister Jean-Marc Ayrault went so far as to call him “pathetic.”

Depardieu countered that “I am leaving because you believe that success, creation, talent, anything different must be sanctioned”. Cinema legends such as Brigitte Bardot and Catherine Denueve quickly jumped in with statements of support for Depardieu. The rock star’s move comes shortly after Bernard Arnault, CEO of luxury giant LVMH and France’s richest man, national hero Johnny Hallyday and actor Alain Delon have also left France for tax reasons. London estate agents report French investment bankers, private equity financiers and high paid entrepreneurs making inquiries.

When Hollande announced his 75% tax rate plan Cameron joked that he would “roll out the red carpet” for French tax exiles to the expressed annoyance of the Elysee Palace. French ministers widely criticised Cameron. The news that it was not mere rhetoric and Downing Street would literally welcome French rock star tax exiles onto the red carpet at No. 10 will infuriate President Hollande…

UPDATE:Downing Street were at lunchtime knocking down this story, by late afternoon they changed their synthesiser tune and said Jarre was indeed in talks to move his technology company to the government sponsored Tech City in London. Where the taxes are lower…

Guido’s Downing Street source says “He’s been into No. 10 to talk to us about defection – it’s like a crappy old spy movie…” The channel replacing the Berlin Wall, with French capitalists fleeing socialist France for freedom…

It turns out President Hollande was all mouth and no trousers last week as he tried to mock Team GB’s medal haul:

“We don’t talk of money, we talk of gold. The British have rolled out a red carpet for French athletes to win medals. I thank them very much for that, but the competition is not over. We will put the French medals into the Europe pot, so that the British will be happy to be European.”

Sixteen Team GB golds later and the cat seems to have got Hollande’s tongue – Britain now has double the number of golds won by the French and are miles ahead of them in the overall medal table.

Boris twisted the knife this morning, delivering the sort of line that Dave dreams of being able to say:

Glamorous thirty-something French housing minister Cécile Duflot was subjected to leers and wolf-whistles from her male colleagues as she gave a speech in Paris yesterday. When sexy Cécile stood up to speak wearing a skimpy floral summer dress the men around her couldn’t contain their excitement, showering her with lecherous cat calls. Heckler-in-chief Patrick Balkany insisted that he was “only admiring her looks“, but that Duflot had probably “put on that dress so that we wouldn’t listen to what she was saying“. Ooh la la…

Cameron’s offer to “roll out the red carpet” for French tax exiles fleeing French socialism provoked screams from French politicians, most poignantly expressed above by media mogul Laurent Joffrin, the epic champagne socialist son of the extremely wealthy, castle-owning, yacht sailing and oil company directing Jean-Pierre Mouchard. No surprise that he is telling the readers of the French Observer to “F**k Cameron”, they fear losing enormous amounts of 75% higher rate taxes to be brought in by the newly elected socialist Parliament. Vive la 30% difference!

Guido shorted €uros last night as soon as the Kiwis got to their desks and the currency markets opened. French Socialist Francois Hollande looks set to become President of France and the Dutch government has fallen apart. International investors are not going to look at that kindly, Guido also has a sense that the election of a left-wing president in France who actually implements a left-wing agenda would frighten the bond markets. Hollande will probably tack to the centre once in office, he is after all only a politician making election promises. If however he sticks to the left-wing agenda that his rhetoric promises, the big macro-hedge funds will take the view that French bonds can join the PIIGS (Portugese, Irish, Italian and Spanish bonds) on the sell list. In government Hollande has to choose between his rhetoric and the reality of the bond markets.

The ECB has already dangerously leveraged up support for the PIIGs via Long Term Refinancing Operations (LTRO). Leveraging up the ECB’s capital base has allowed it to put nearly €1 trillion of PIIG sovereign debt on its books, at a massive leverage ratio of nearly 40 to 1. If the ECB were a marked-to-market hedge fund instead of a Central Bank we would say it was investing recklessly, a mere 2.5% market move against it would wipe out all of its capital. The market doesn’t move it against it because it massively intervenes to support its own position.

If however the German Bundesbank decides that the ECB can’t go on literally doubling the chips on the table – up 106% since last year – the €uro as is could be too big to save. That is why all Osborne’s Treasury’s protestations about the IMF always getting its money back count for little. The US and China want to see Germany bet everything on the €uro before they join the rescue party. German politicians – including those of the left-of-centre SPD – expect Hollande to govern from the centre whatever he says on the hustings. British left-wingers hoping for a left-wing surge on the continent sparked by Hollande should be careful what they wish for, it would trigger the end of the €uro. If Hollande abandoned Sarkozy’s deficit reduction programme Germany would probably seek alternative arrangements – a hard-€uro Fiscal Union made up of Northern Europeans who run their affairs like the Germans and a looser soft-€uro of Southern Europeans who overspend. The dream of a united continent of Europe with one currency would be over…

If you ever get done for your taxes then Harry Redknapp provided the get out of jail free card with his successful “I can’t read or write and I’m too rich to bother dodging tax” defence. French socialist letch Dominic Strauss Khan’s is trying an equally ambitious line in his latest sex scandal. In reference to paid-for-orgy allegations, his lawyer, Henri Leclerk, said on his behalf:

“He could easily not have known, because as you can imagine, at these kinds of parties you’re not always dressed, and I challenge you to distinguish a naked prostitute from any other naked woman.”

It remains to be seen if a jury will be asked to accept that challenge live in court…

Sarkozy and Dave’s bromance peaked on a balcony in Benghazi, but hit a new low when the half-pint refused to shake hands after Dave’s veto before Christmas. Well blink and you would have missed their forced man-love in Brussels this afternoon:

Given that Sarkozy claimed last night that the UK “has no industry“, you might have thought Dave would be playing it cool, but he instigated the smiles and bat backs. All ten seconds of them…

Sarkozy’s chances of re-election have taken a battering as France is no longer judged the safest of credit risks. What this means is that the French backed €uro bailout fund is no longer a AAA credit risk. Slovakia, Italy and Austria also got downgraded. Greek debt restructuring talks have broken down and Greek 10-year debt is trading at 20c/€ to face value. Which shows what the market thinks of their chances of getting their €uros back…

Though the economic prospect of a French downgrade is rather scary, the political repercussions are frankly hilarious. Sarkozy is in an election year for one, and his head of the Banque de France has oeuf all over his face. Back in December a mighty row broke out when Christian Noyer said that Britain’s credit rating should be downgraded before them.[…] Read the rest

Labour types are scraping the barrel this morning claiming that Newt Gingrich has “stolen” Ed’s much derided “predators” line. Tom Watson is crowing, Political Scrapbook are grandstanding and Guido is laughing. Ed isn’t even the first European leader to develop the theme. […] Read the rest

We think of France as far more socialist than Britain yet French middle class families are far better off than their British equivalents in after-tax terms, despite higher basic rates. French taxpayers get an allowance of up to €2,300 per child under 7 years of age called les frais de garde d’enfants towards the costs of child care outside of the home, a small tax rebate called les frais de scolarité for each child in education and up to €6,000 rebated for l’emploi d’un salarie a domicile covering a house-keeper or nanny.[…] Read the rest

Nick Clegg has broken ranks with the political establishment on Trident, telling Nick Robinson “We have to be realistic and candid about what we can and can’t afford as a nation”.

During the Cold War the logic of Trident and other nuclear missile systems was compelling, now the threat is from terrorists and rogue states the case for Trident is nowhere near as strong. […] Read the rest

Guido is looking forward to summering at the Maison Secondaire even more this year. France has just cut booze and restaurant sales tax from 19.6% to to 5.5%. Booze taxes are already reasonable in France, this makes going out even more reasonable. […] Read the rest